Understanding Joint Venture
While joint venture is promoting growth and productivity, being able to find the right partner is what matters a lot. It is integral to conduct thorough research to be able to do this and due diligence at the same time. With this, you will be able to save money and time as well by partnering with existing customer, investor or supplier or with someone whom you have met in social media.
As a matter of fact, in social media, you can find companies that follow you, added you as a friend or visited same pages as you do can help in forming fruitful partnership. Great care has to be taken into consideration in designing as well as drafting of such agreement in order to clarify who exactly owns who.
The process of locating partners are going to be tedious and frustrating at some point. Much before approaching your prospective partner, it is critical that you practice due diligence. Today, you can find numerous companies that publish their financial reports directly on their site which can be acquired through Registrar of Companies. It is imperative that you download the latest accounts and take time to review it or perhaps, watch news to be able to be up-to-date with stories about your prospect joint venture partner.
You should always make enticing offers with your prospective JV partner and spell out the nitty-gritty of the deal such as customers, intellectual property rights, finance, legal issues and so on. When you create a draft proposal, make it a point that you clearly state what your objective and aims are. If for example that the prospective partner accepts your offer, then you need to create an agreement that will include details which include stake and investment of both parties, objectives and aims, legal status of the JV, makeup management team and future exit if needed. So to ensure that things will go according to plan, it is essential to learn everything in the agreement and your partnership.
The primary reasons why you want to form joint venture partnership is that, you want support of a high profile partner who has got the resources you need for continuous growth. This can be literally about anything that can help expose your products to a bigger market like a mailing list or maybe your expected partner runs an established forum that can put a banner to advertise your products. Well quite frankly, you are going to find more reasons why increasing number of entrepreneurs take JV into consideration.
Because all businesses have its strengths as well as weaknesses, it makes sense to find a JV that will fill in the weak spots. At the end of the day, JV is about growth.